BLM solicits second round of funding for shale leases

In an effort to spur development of technologies that could lead to production of billions of barrels of domestic oil supply, the United States Bureau of Land Management announced Jan. 14 that the federal agency will solicit nominations for a second round of oil shale research, development and demonstration leases.

The BLM published a notice in the Federal Register soliciting nominations for oil shale research, development and demonstration leases in Utah, Colorado and Wyoming.

This follows a similar solicitation in June 2005 that resulted in the issuance of six oil shale research, development and demonstration leases in Colorado and Utah in 2006 and 2007 respectively.

"Broadening the scope of research into oil shale technologies will help accelerate the development of these vast western resources, and as a result lessen our dependence on foreign sources of energy," said James Caswell, BLM director.

The shale is a fine grained sedimentary rock containing organic matter from which oil may be produced.

The BLM's shale program could result in the addition of up to 800 billion barrels of recoverable oil from federal lands in the western United States.

According to the U.S. Geological Survey, the U.S. holds more than half of the world's oil shale resources.

The largest known deposits of oil shale are located in a 16,000-square mile area in the Green River formation in Utah, Colorado and Wyoming, including the Castle Valley region.

Federal lands comprise 72 percent of the total surface of oil shale acreage in the Green River formation.

The oil shale research, development and demonstration leases in the second round will be issued for 10-year terms and with maximum sizes of 640 acres.

The six leases issued in Colorado and Utah were for 160 acres. But the leases also contained an additional preferential right area of 4,960 acres for conversion to a 20-year commercial lease once commercial production levels had been achieved and all requirements had been met.

Since offering the original research, development and demonstration leases and completing an analysis of oil shale potential and availability on public lands, the BLM has determined that 640 acres will likely provide reserves sufficient to support a commercial operation.

The BLM will only consider applications that demonstrate new technologies not currently being tested in the initial round of research, development and demonstration leases. Entities that currently hold the leases need not submit additional applications.

The oil shale research, development and demonstration leases are just one of several steps designed to harness the vast energy resources.

Last November, the BLM finalized regulations governing the commercial leasing of oil shale resources on federal lands and, in September, the agency finalized a programmatic environmental impact statement setting aside approximately 1.9 million acres of public lands in the three states for potential commercial oil shale development.

The BLM manages more land - 256 million acres - than any other federal agency. The property, known as the national system of public lands, is primarily located in 12 western states, including Alaska.

The agency, with a budget of approximately $1 billion, also administers 700 million acres of sub-surface mineral estate located throughout the nation.

The BLM accomplishes the federal agency's multiple-use mission by managing activities like outdoor recreation, livestock grazing, mineral development and energy production as well as conserving natural, historical, cultural and other resources on public lands.